John Key says no to fast tracking CRL …. for now

We met on 4 February and discussed the proposal contained in your letter of 30 January in relation accelerating the City Rail Link project .

In the days following that meeting you would have seen comments I made in response to media questions about your proposal.

I want to acknowledge firstly your desire to accelerate the City Rail Link project and the work you have done generally to champion it.

We both share an understanding of the importance of the Auckland CBD to the economy and quality public transport is an essential ingredient of a properly functioning CBD and city.

That is why the Government I lead has invested so heavily in such things as electrification of rail in Auckland and major roading projects such as completing the Western Ring Route.

As you are aware in my speech in June last year the Government accelerated the timing of start of construction on the City Rail Link project by a decade – from 2030 to 2020 – and set some conditions for it to be accelerated even further.

In the speech I announced the Government was committing to a joint business plan for the City Rail Link with Auckland Council in 2017 and providing its share of funding for a construction start in 2020.

And I said we are prepared to consider an earlier start date if it be comes clear that Auckland’s CBD employment and rail patronage growth hit thresholds faster than current rates of growth suggest.

While the data from the Ministry of Transport does not currently show the justification exists for further acceleration that does not rule out the possibility that the thresholds will be hit in future.

Your letter also outlined some projects, many being undertaken by the private sector that could be affected by the City Rail Link and raised the question of whether an opportunity existed to reduce disruption to the CBD and some of these projects.

I indicated in the meeting with you that I would be getting some advice on the issues you raise. I am in the process of receiving advice including on the possible impact on some of the projects you cite.

I would also anticipate that officials and the Minister of Transport will continue to engage constructively with your Council and Auckland Transport about issues related to the CRL.

While there are no current indications that the conditions exist for accelerating the CRL as I said earlier that does not rule out such conditions existing in the future.

The fact is that the Government has made a heavy investment in both rail and road infrastructure in Auckland and that will continue.

I am sure we will be discussing this issue again at our next meeting.

Yours-sincerely-

Rt Hon John Key
PRIME MINISTER

In other words “nice try Len but we’re too busy building a whole heap of roads”.

I happened to run into Len last night and had a quick chat to him. As he always does, he believes the government will eventually come around and he specifically mentioned that he thinks the private sector will start putting more and more pressure on the government to get the project done sooner. I’m also aware that both Key and Brownlee have had discussions with Precinct Properties about their planned development and the CRL and we know they are big supporters of it – especially as some parts of it are effectively a pre-requisite for their plans.

The other thing to remember is that in recent months we have seen rail patronage start to take off again and indications are that March could be a massive month. In fact it wouldn’t surprise me if we end up seeing some new records set. What’s more this growth is coming before we see the first electric trains on the tracks carrying actual passengers (which happens one month away today).

John Key has left himself an out and my guess is he will probably end up having to use it

66 comments to John Key says no to fast tracking CRL …. for now

Sensationalism again…. He didn’t say they were too busy building roads, those are your words. Making sure the timing is right is sensible and wether you like it or not vehicles are the predominant mode not just because there is no buses or trains but because people prefer to drive. That wont suddenly change over night when the CRL is built

While they carry on with wanting to build the stupid motorway to Warkworth rather than invest in the CRL then this is not sensationalised. Likewise Key’s claims of gov’t investment in PT infra. Electrification was a done deal before he was elected and Auckland had a funding mechanism in place for the EMU’s – which was scrapped by his gov’t. I say this as a motorist who uses SH1 north on a very regular basis but who also uses buses and trains when I need to attend events / meetings in the city – not just the CBD.

Most people drive not because they always want to but because in most situations it’s simply the most logical decision. The reason it’s the most logical decision is because we spent decades only investing in making better roads. Where high quality PT has started to be put in people have started using it. People respond to the investments and decisions we make so the focus should be on building the city we want. Not just building based on what we have now.

And yes the timing is important to get right. The CCFAS which the government agencies were involved in recommended that it be completed by 2020.

This is exactly right Matt, you articulate it so well, how do so few people understand this? In some ways this answers your question from yesterday’s post. When I lived in Mt Eden, the buses along Mt Eden Road came every few mins between 7 and 9 and every one of them was filled to capacity. It was so easy to walk out your door, arrive at the stop and not wait long for the next bus. The only time this didn’t work perfectly was when three buses arrived at once, leaving a longer wait for the next one, largely down to each bus catching up to one another when the bus lanes randomly stopped along the route… This useful service is in place and so people use it.
Over the five years that I’ve been using the train to get into the city from out West, I have experienced the patronage increases, not only during peak, but also off-peak times. However, if the govt waits for significant increases just out of a natural rise in patronage with the current supply, they would be waiting a long time before actually implementing a better system. It will be interesting to see the March rail use figures, and then following that, patronage after electrification has been in place for awhile, and the system is (hopefully) running smoothly.
As an aside, if the govt really needs to see significant patronage increases, why don’t they take into account the huge numbers of people who train to music events, events at Eden Park, or even in the city? They improve the service for these situations and correspondingly the demand meets the increased supply. Surely this could be paralleled with a better inner-city/suburb service, aka the CR

“… quality public transport is an essential ingredient of a properly functioning CBD and city.

That is why the Government I lead has invested so heavily in such things as electrification of rail in Auckland and major roading projects such as completing the Western Ring Route.”

Yes JK, your Government deserves full credit for un-cancelling electrification after cancelling it coming into power. Not all of us have such short memories that we can’t remember this.

Removing said PT-wash mention of doing something that had actually started in the last days of the previous government, this is what JK just said:

“… quality public transport is an essential ingredient of a properly functioning CBD and city. That is why the Government I lead has invested so heavily in […] major roading projects such as completing the Western Ring Route.”

Not much comment required here. I just want to bang his head into the side of a bus sometimes.

Standard response from the Prime Minister and nothing has really changed. That said I would say his Office will be keeping an eye on the rail patronage figures and CBD employment figures on a quarterly basis.
What the Mayor’s Office has not done on its side is the funding package for Auckland’s half and waiting until after the elections to release it will not impress the City that much.

There are two choices when you boil it down:
1) Front loading debt and we get stung through rates
2) Adopting a Hong Kong and/or Tokyo Model especially around the stations (which are privately owned and have large scale developments above them) but adapted for our suitability

Ben, Hong Kong’s rail operator MTR Corporation was set up by the govt in the 1970s thus all the land it owns was and in some instances still is govt land. Likewise, in Tokyo and many other places in Japan, land owned by the largest rail operator JR Group was and in some instances still is govt land. Same goes for Tokyo Metro and other subway operators in Japan which are local-central govt shared entities. Commercial buildings at stations in Hong Kong and Japan are thus not in ‘private hands’ in order for them to operate sucessfully. Knowledge and expertise was / is imported to ensure and maintain success. Lessons for Auckland there.

No, he’s time-wasting and waffling in an effort to make it appear work on the issue is proceeding behind the scenes.

It is a classic example of Sir Humphrey speak: eg, “Yes as I said I’m glad you asked me that question because it’s a question that a lot of people are asking, and quite so, because a lot of people want to know the answer to it. And let’s be quite clear about this without beating about the bush the plain fact of the matter is that it is a very important question indeed and people have a right to know.”

The Prime Minister already has a wealth of advice on public transport matters available to him from both national and international sources. This Blog alone can and does provide all the information he needs to make a swift and informed decision on the matter.

The sole reason that this administration is not moving ahead with the CRL is because they simply don’t want to.

Not a bad statement. Certainly no victory for the anti-CRL brigade. Every time Key has to pronounce on it he inches closer and closer.

It seems like this is an outward expression of an internal conflict in the ‘business party’. There used to be straightforward agreement between city and country business interests, and in the transport sector that largely meant more motorways. Now the needs of the city business and country business are diverging on this matter. This is a function of the times, the scale of Auckland, and the nature of urban economies.

I see Key as more open to the needs of urban business than say other more provincial minded members. But this isn’t easy; in its bones National struggles to grasp the idea that prosperity can come from anything other than the extraction of physical resources.

I suspect that if Labour weren’t so inept and National weren’t in such a comfortable position going in to the election, then National would need to be doing a lot more to court the inner Auckland vote and hence would be more likely to support the CRL. But given that Labour have put no pressure on National at all, National can still afford to neglect some issues that are important to the Auckland electorate such as public transport.

This has nothing to do with patronage numbers and everything to do with what it takes to win the election.

“the thing is: hundreds of thousands of Aucklanders asked for the CRL at the two last elections, but Key will do it only if a couple of businesses want it?
..”

No, Key will do it if those hundreds of thousands of Aucklanders vote with their feet and start using what’s already there. If he also listens to a few of his business mates, then all the better. Don’t forget there’s an election in six months, and Key is astute at reading public opinion – if he has to “bribe” Auckland voters, then so be it. 😉

Nonsense. Hundreds of thousands of Aucklanders didnt vote for CRL. First time they voted for the other guy not from Auckland City. Second time they voted for the political veteran who hadnt pissed off enough people. There is a difference. To say that Len returning to office is majority support for the CRL is the same as John Key saying he has a mandate for asset sales. Technically yes on both, in reality, not so much.

The PM is all in favour of Auckland Rail just not in favour of paying for it. That is the same position as every other PM we have ever had. The Mayor is in favour of central government paying for it, same as almost every Mayor. He just doesnt know how to pay for his part of it other than running up yet more debt. I think the answer is to start building some of the ore expensive bits like building a station. That makes the economics look better as sunk costs are removed from the B/C calculations. The costs go down and the B/C looks better by the year. It is one of the practical reasons that bridges are always built first for motorway projects. Sunk costs protect your project against changes in the funding cut-off.

The CRL is capital expenditure that has an expensive up-front cost and benefits that pay out over decades (or in reality, centuries). It’s the economics textbook example of something that should be financed with debt and paid off gradually.

Borrowing to fund operating expenses in generally a bad idea. Borrowing for capital expenditure with long term benefits, is exactly the right approach.

How would you even build the CRL without debt? Pretty much the only option I can think of is something like a capital gains/betterment tax which would capture windfall gains from the project itself. But you’re still funding the project with debt, that way – it’s just that it’s now private debt (since everyone just chucks the value of the tax on their mortgage).

“It’s the economics textbook example of something that should be financed with debt and paid off gradually” umm no most textbooks would suggest debt for an asset that is expected to deliver a financial return ie NPV>0. For a public asset that returns most benefit in terms of higher property prices then public debt might not be the way to cover 100% of it. Especially when the Council has already been on a borrowing frenzy. The first step surely is to cut some costs and put the savings aside. ATEED for example could just be closed down and the staff told to find something useful to do. Second is to flog off assets they dont need any more.

> most textbooks would suggest debt for an asset that is expected to deliver a financial return ie NPV>0

This is public spending, we’re building the CRL assuming it has a welfare NPV>0, not a financial NPV>0. But the logic is the same either way. If the NPV of whatever benefits we’re counting is positive, it makes sense to borrow to get the benefits now. And if the NPV of benefits is negative, it doesn’t make sense to fund it by any method.

If it’s a good idea to shut down ATEED, it’s a good idea regardless of whether and when the CRL goes ahead.

* If we can at least get the track extended to a station at the Aotea Centre, then this would extend the ten-minute walk catchment, and would also provide something of a proof of concept of the whole CRL idea.

* If we could provide a branch as well out to the Wynyard Quarter, as a precursor to North Shore rail, this would mean that this area was properly connected into the public transport network, and there would be two more terminus platforms for the central city rail system while we build the CRL.

This latter suggestion comes from my time working in Wellington rail, where we had more options for daiy-to-day operations by having seven platforms off the two inward ‘roads’ (with another road and two more platforms for Johnsonville).

Views, criticisms? I am not sure what the current established view on this is, so would welcome comment.

As I suggested above I think building stages that give immediate benefit while rational is actually a mistake overall. If you lose the low hanging fruit then the economics for the later bits just gets worse and worse. Better in my view to build some part of the project the is really expensive with little return with ratepayers money to make the case for the central government money to complete the project more compelling. If you want to build a highway through a cathedral you build it up to either side first so the money is spent for no return then the case gets really strong for the last little bit. The city has to play these games if it wants CRL.

Tricky. Sydney’s City Circle was built in stages and, until Circular Quay got built, existed as eastern and western stub tunnels until 1956. I suppose it shows it’s possible, but CQ isn’t underground, it’s elevated.

The problem with only tunnelling up to Aotea is that when it comes time to extend it, we still need to get a tunnel boring machine in and out and that takes up a lot of room. The current plan is to use the Aotea Station box to do this, but you can’t have a TBM hole and a working station at the same time.

You’d have to do it the other way, doing the deep bore first then doing the Albert St cut and cover later would end up costing (I’m guessing) 80% as much but only delivering 20% of the benefits of the full CRL as you could only run Western Line trains on it. The cost may be too high to stage it.

Well Brown does want to stage it but not in the way that Ross is suggesting, there is a need to get on with the cut and cover section right away for these works to be in place for other above ground projects but also in order to minimise the disruption. As Andrew says above it is unlikely that we could complete and use the Aotea station before the TBM section has been bored. But there could be minor operational efficiencies from storing trains further up the tunnels, but then that would require fully track and signals commissioning, so more than just tunnel building, which may not be cost effective to do in part.

While extending the reach of the terminating system to the county’s most concentrated employment area would be handy, the real value of the project comes from its network effects: the through routing of the whole system. So probably the best way of staging it is to first build the cut and cover, then Bore the remaining tunnel and open Aotea station, then complete K Rd and Newton stations over time. The stations are relatively expensive compared to tunnelling, especially deep ones.

Getting trains through the CRL and opening Aotea as soon as possible brings the highest value at the earliest moment. We looked at this earlier and it is workable to complete stations around a functioning tunnel.

And we’re going to need the capacity addition that only the CRL can provide as soon as it can be completed.

However working down from Mt Eden to Aotea has the advantage of both early generation of benefits through diverting the Western line services which gain the most travel time benefits from the CRL out of Britomart and freeing up platform capacity to make the platform reconfiguration at Britomart for CRL easier.

If they bore from Aotea to Mt Eden, then all the spoil will have to go through Britomart or by truck through CBD. Doesn’t sound a good idea. Why can they not bore from Mt Eden? If they have to turn the machine around at Aotea, at least they have the first tunnel to remove spoil.

I wonder if there is any way we can entice any National Party Ministers or Auckland Members of Parliament to hear Professor Peter Newman at the next “Auckland Conversations” at the Aotea Centre on 1 April at 5pm for 5.30pm start.
Professor Newman will share with attendees Perths’ experience and the positive difference rail has made to Perth as a city. I have registered to attend and am looking forward to it and I suggest readers of this blog come along and bring as many interested people as possible. Google Auckland Conversations to register – there is no cost.

To me John Key’s message to Len Brown is clearly economics above politics. The challenge is to do everything possible to get train passenger numbers up to justify accelerating the CRL.

The days of low rail patronage will only end after electrification, weekend shutdowns stop, introduction of integrated zone/time fares and when local buses connect rather than compete with the rail network.

Once the system; buses, trains, ferries, NEX, & Airbus is seen to be functioning as a congestion free entity we might finally get out of their cars and the CRL will seem a non brainer to everyone.

See above. The days of low patronage are over already. Wait till they take off with new, reliable, quiet trains. Add a bunch of bus lanes / busways and interchanges and we’re well on our way #CFN. This is possible and the funding is there. It’s just being spent on the wrong things.

And yet, unbelievably, there are still people who think Britomart and the rail network modernisation are a waste of money. I work with a few of them. They are petrol-heads one and all and discussing Auckland transport issues is, frankly, an exercise in futility.

Ok I will fess up to this. I certainly support rail and CRL but I have often thought how Britomart was the solution to a problem that didnt exist. It allows people to interchange between ferries and trains but how many people do that? Had Britomart not been built then a better station location could have been chosen that would have had a walk up catchment all around it where Britomart has 1/2 a catchment and a red fence. The only part we have built is probably in the wrong place.

When Britomart opened a long term trend of increasing rail patronage began which continues to this day. This suggests to me that the new station did indeed help with a problem that existed at that time and also that it was placed pretty much exactly where it was wanted.

If you think it is in the wrong place then where would a better location be found? Beach Road perhaps?

The long term trend started with the introduction of DMUs but I agree the extension of tracks to Britomart was important, the station itself well who cares? But my point is stations should be located where they serve as large a catchment as possible. Britomart has 1/2 to 2/3s of a catchment because it is close to the wharves. Sydney has a station at Circular Quay which works because of the huge number of ferry passengers, Auckland hasn’t got that and probably never will. As for where would have been better well a station at the old railway station to serve Quay Park and another on Albert near Swanson would have had a more complete catchment and better access to the Western Reclamation. Britomart was from the “something must be done, this is something, we must do this” school of thought.

you must be the only person in Auckland that thinks Britomart isn’t successful! Has so many ticks, bottom of Queen St makes is highly legible, and location along Quay St great for legible access to Wynyward and Britomart. And interchange with ferry is important, Lorde seemed to find it useful to get from Devonport to Morningside, and I’m sure lots of Ferry passengers catch trains onto Newmarket, Ellerslie etc. Also very handy for people coming from around the region to go to Devoport, Waiheke etc.
Britomart also ticked the affordable box, going to Albert St in 2002 would have required demolition of Downtown Shopping Centre, and a bunch of extra cut and cover. Too expensive on its own, but worth it as part of a much bigger project.

The only fault with Britomart is that it is a terminus. As one of a bunch of city stations it’s very well placed, but as the only one it’s necessarily limited in its coverage and, like Wellington’s, hovering at one edge.

If the tunnels were bored from the Mt Eden end toward a completed Aotea Station there surely would be sufficient space to remove vertically the boring head and shield section of the machine without unduly affecting the station. Remember that the rest of the machine fits inside the completed tunnel and so could be drawn out back to Mt Eden once the larger head and shield are removed. I don’t see why this can’t be done. The TBM is, after all, shipped in sections and to ‘turn it around’ the whole lot would have to be disassembled anyway. I do not believe that this is something that would stop the building of, and operating, Aotea station before the Aotea-Mt Eden section is completed.

Yes you’re probably right Don. The station stretches between Vic and Wellesley Sts, and the TBM could terminate and be dismantled south of the Wellesley/Albert intersection at that broad dip in Mayoral drive west of the Aotea Centre.

So by building the the lower third of the Link and Aotea Station and commissioning them we would get the rail network to the heart of the greatest concentration of people in the country but we would not be delivering the huge capacity, frequency, and route improvement transformations that linking up the network provides. But we would get a hell of a lot closer to that, and essentially chop up the bill into more manageable bites (like they have been doing for decades with motorway building). Also the above ground disruption would be distributed better both in time and space.

What I’m not clear about (Nick?) is how much effect this would have on the number of trains we could push through this new set up? What would be the necessary dwell time at the new Aotea terminus? If it’s 3mins then that’s still only 20 an hour. Although with crossovers and utilising both platforms could this be increased significantly? Would some services still terminate at Britomart? Then there’s still the limitation of the Britomart throat.

I would think the best approach would actually be to build most of the tunnel from Britomart to Aotea but not yet open Aotea station. Then you could use the tracks in the tunnel for interpeak stabling.

If you can leave say eight trains inside the tunnel between the peaks, the limitation of 20 trains in and 20 out can become more like 24 trains in and 16 out in the morning peak, and 16 in and 24 out in the evening peak. That could mean eight trains an hour on the three main lines (in the peak direction at peak times) and two an hour to Onehunga, for example.

So no net gain in total movements but the ability to run more in the peak direction, which equates to much better service levels for most people.

Less than a year later and it is now 11 mil. 3 months to go and already 10% growth. To reach 20mil by 2020 a rate of 10.4% is sufficient. So what do you say Mr Key? How about we wait till June just to be sure then you can send a note to Treasury to ring fence the funding over the construction period?

Some of the posts about a temporary Aotea station have made me wonder if we would be better off doing cut and cover to Aotea and to Wynyard instead of the CRL – at least for the next decade or two. We would get a lot of the benefits of the CRL (higher throughput due to two terminating stations, addition of two more city stations), and I imagine it would be less than half price (am I wrong?). It would be much easier to get 1bil funding out of the national government who look like they will be in power for a while yet.
In the longer term I think the benefits of completing the CRL (e.g. western line trains getting to city quicker and the K road / newton stations) actually don’t look that great compared to other projects we could complete with the $1bil (e.g. light rail up dominion road).
Before you go and spend $2bil you need to make sure you are getting the biggest bang for buck possible. I’m a bit concerned that no one has thought about what else we could do with PT for $2bil.

You wouldn’t get any higher throughput, every train would still be going in and out of the same Britomart tunnel as they do today.

Actually the City Centre Future Access Study looked at about a hundred options and alternatives, a dozen of those on detail, including light rail up Dominion Rd.none gave better performance for the money. Dom Rd light rail is fine for replacing one bus route with trams, but the CRL supercharges the entire regional rail network. The key difference is we a
Ready have three main rail corridors goin under-utilised due to constraints at the city end. All the other options don’t have regional corridors already built and in place waiting to be unleashed.

Jimbo it seems you don’t grasp the greatest value of the CRL: Through Routing. Every single user of the whole network will benefit from the doubled frequencies and new destinations offered by no longer having to stop and reverse all the trains in the city. Just sprinkling new termini about the city would be a very expensive way to add some reach and capacity but nowhere near as efficient nor high value as hooking our strange little in-and-out commuter system into a high frequency through routed Metro style core of the PT system.

Does the lack of a CRL restrict Hamilton and other centres having a passenger connection to Britomart in the future? Seems Tauranga is quite keen for a train service reinstatement per below for example.

Yes. Britomart is at capacity (or will be with electrification) and so any trains from outside of Auckland could only happen if full trains from within Auckland were sacrificed. Understandably Auckland Transports priority is on trains from Auckland rather than elsewhere so they are not going to give up any slots.